Layoffs Can Be Painless

By Oduor Ong'wen, The Nation (Nairobi) 3
September 2000

Nairobi—As you are aware, the government is in the process of
implementing the staff Retrenchment Programme which is aimed at
achieving staffing levels in the Civil Service... you are hereby
notified that you have been identified amongst others to be retired
under the programme... Please make sure that you formally hand over
your responsibilities and any Government property that may be in your
possession to the appropriate office....

This is an extract from a letter to one of the Civil Servants affected
by the on-going retrenchment process. The exercise is planned to
remove some 25,783 staffers from the Public Service Commission
register by end of this month and retire close to 50,000 by 2002.

When Finance Minister Chrysanthus Okemo announced in his June 15
budget speech that the government was setting aside Sh7 billion for
the public service rationalisation plan, few paid much attention. Most
listeners and analysts had other priorities, which included: the
increase in the Value Added Tax (VAT), waiver of import duties on
power generators, and a ban on importation of junks in the name of
motor vehicles, among others. Now, the chickens have come home to
roost and suddenly hit this best country North of (the river)
Limpopo and South of Sahara like an unprecedented pestilence.

I submit that had our bureaucrats, politicians, labour aristocrats and
civil society paid sufficient attention to the matter, we would not be
bemoaning the current retrenchment onslaught.

That the civil service is bloated, highly inefficient and grossly
under-motivated cannot be gainsaid. That the culture of insolence,
dishonesty and irresponsibility has taken root in the public service
is not in doubt. What is in doubt, in my opinion, is whether the route
the government has taken in the civil service reform will deliver the
service to kingdom come.

From the outset, cognisance must be taken of the fact that civil
service reform is not novel. Only its character has changed over the
years, beginning with its massive expansion in the early years of
independence through a series of training programmes, emoluments
reviews, Africanisation and Kenyanisation and development of codes of
practice and ending in the current wave of heartless
downsizing. I say heartless because we could trim the size with less
pain or no pain at all. But, trust Kenyans to always spoil the broth
when it is just about ready!

The biggest paradox is that the government is rendering so many
Kenyans jobless in the name of poverty reduction, a concept predicated
on employment creation as one of its pillars. Most painful, however,
is that this country can afford to throw into the trash a whopping Sh7
billion at a time we are ready to sell our national soul and flesh to
the Bretton Woods twins for cash.

Our policy dreamers and implementers would like to have us believe
that in the present circumstances, there exists no sane policy option
to the rationalisation of the civil service and other public service
sectors other than dumping, with a loud thud, a staggering number of
potentially hard-working Kenyans the New Bretton woods
design. According to them, this is not merely the best solution there
is: It is the only alternative to Hell on Earth about now. Any
contrary approach will ensure the worst economic catastrophe this
planet has witnessed since the 14th Century New Dark Ages.

The renumeration of the more than half-a-million public servants has
over the years been done through deficit financing, particularly
through domestic borrowing at rates sometimes as high as 28 per
cent. It currently costs more than Sh60 billion or nearly 10 per cent
of the Gross Domestic Product (GDP) and close to 40 per cent of the
recurrent expenditure. This is unsustainable for two main reasons: the
high interest rates created by domestic borrowing has crowded out
business out of the money market and invited international currency
speculators (with potential to reproduce the East Asian experience of
1998); and the government has had to drastically cut on the
development expenditure.

In the Civil Service Reform (CSR) programme launched in August 1993,
retrenchment of staff was given the highest priority. The methods
employed were mainly the Voluntary Early Retirement (VERS), which as
at February 1998 was estimated to have shed off some 36,000 employees
and cost the state some Sh6.8 billion; and natural attrition which had
claimed over 26,000 by February 1998 at a cost of Sh2.2
billion. Abolition and freezing of vacant posts was also employed,
although no statistics is readily available to show its contribution
to public service staff reduction. Evidence available, however, points
to negative impact of the freeze as some departments like the police,
prisons and defence continued to recruit, resulting in an staff
increase of almost 20 per cent during the freeze.

The CSR was to be implemented in three phases spanning seven
years. Phase One (CSR 1) was to focus on cost reduction measures by
reducing the number of wage earners in the public service. CSR II was
to emphasise enhancing the beforehand of the service while the third
final phase (CSR III) aimed at the consolidation of the gains accruing
from the preceding phases.

In the current round of retrenchment, 18,503 are seen as excess
baggage in their respective departments, 7,280 have had their offices
abolished, while 12,500 are expected to quit through natural
attrition. Phase II will see the retrenchment of 6,565 by July 2001
while the final phase ejects 9,981 from the civil service by July
2002.

The Office of the President is to top the retrenchment list with 9,500
being shown the door, followed by the Ministry of Health with
8,711. Environment and Natural Resources Ministry will shed off 7,815
employees, Agriculture and Rural Development 3,577; Local Government
2,212; Lands and Settlement 2,082, Education, Science and Technology
1,201, and Transport and Communication 871, to name the most affected.

As the state's financial health improves, it is envisaged that
staff compensation and working conditions in the civil service will be
appropriately enhanced. The object here is to ensure retention; boost
of morale and corresponding increased output. Of course, critics point
out and the government seems to agree that better pay and improved
working conditions, though significant, are only a small part of what
it takes to attract and retain quality staff. Former Finance Minister
Simeon Nyachae said during his 1998/99 budget speech that improvement
of efficiency in the public sector requires hiring and promotion to be
based on merit. Good suggestion this, but do we care?

Under CSR II, a number of very useful components were carried forward
from CSR I and reformulated for sharper focus and avoidance of
pitfalls. Some of these included improvement in the management of
financial and human resources; pay and benefit reform to improve
recruitment, retention and morale; management of the wage bill with a
view having the government operate within its means; review of
ministerial and departmental policies, missions, visions, goals,
objectives and strategic responses; and review of government
structure, functions and staffing.

What clearly emerges is that the designers of the programme are
acutely unaware or deliberately elected to ignore the causes of the
existing situation of ineptness and mediocrity in the civil
service. Besides downsizing and improvement on compensation, there is
a need to restore professionalism, with advancement being firmly
pegged on output as Mr. Nyachae advocated.

In his budget proposal, Mr. Okemo proposed the shedding off of 60,000
civil servants. This has understandably been reduced to 40,000. The
indications are, however, that the majority of those retrenched are
going to be non-professionals and junior professionals, the bulk being
messengers, cleaners, secretaries, clerks and junior executive
officers with a sprinkling of professionals and tradespeople. I
don't foresee a state worth its respect giving a senior engineer,
doctor, lawyer, quantity surveyor or economist some Sh40,000,
baptising it as golden handshake and sitting easy thereafter.

I suggest that Mr. Okemo, Mr. James Ongwae, Mr. Martin Oduor-Otieno
and the rest of the reform team halt the retrenchment programme until
sanity has been given a chance. I offer a five-step suggestion in
civil service rightsizing:

First, the government should seriously undertake the decentralisation
and devolution of its powers and functions. However, before this is
done, a comprehensive review of the Local Government Act has to be
accomplished as a matter of emergency with a view to creating
structures of good governance at the local level so that those who
govern at that level identify with and derive their mandate and
oversight from the communities they serve.

The second step is for the central government to conduct an inventory
of its retained functions and an audit of its human resources with a
view to matching its core functions with the human resources. This
will help the state establish precisely how many economists,
agriculturists, lawyers, sociologists, political scientists,
mechanics, masons and messengers, cleaners etc it needs.

Third, the state has to offload the personnel it does not
need. However, they should not be dumped, as they still constitute an
important resource for the nation.

It is an open secret that the category that constitutes the biggest
drain to resources in the civil service is the professionals. These
are people who get into the office to use telephone services,
transport, stationery, time and material provided and paid for by the
state to run their parallel (often informal) private practice and
consultancies. Once these professionals have been identified, they
should be given a functional training to enable them establish their
consultancy firms.

The Sh7 billion can be used as a revolving loan fund to help these
people establish and pay back at market rates after a grace period of
between two and three years. The professionals can be given loans of
between Sh2 and Sh5 million depending on the need as an encouragement
and to ensure they create employment and repay the loans. These
upstart consultants may be guaranteed priority in government projects
for a given period, say five years.

Likewise, semi-skilled unskilled workers can be trained, encouraged to
establish business on a cooperative basis and given loans from the
same revolving fund to be repaid at market rate. They should,
likewise, be guaranteed priority in procurement. For instance, if a
group of the retrenched established a cleaning agency, the loan could
be used in purchasing cleaning equipment and material as well as
establishing their offices. In return, the government can give them
priority when tendering for the cleaning of government premises.

The fourth step will be for the government to design a capacity-
enhancement package for the remaining public service based on sound
training needs assessment, proper focusing of training, using credible
training institutions and sufficiently equipping the service (for
instance, computerisation of key functions, provision of adequate
transport etc.)

Lastly, for those who remain in the civil service, there should be
functional training, adequate remuneration and other benefits and
opportunity for personal advancement. Merit and nothing but merit
should henceforth be the guiding factor in recruitment, deployment,
promotion and reward.

Properly handled, retrenchment could aid in employment creation
besides enhancement of efficiency in government delivery. What is
currently being implemented in the name of civil service
rationalisation is grossly insensitive and brutish.